At Kales & Kales, PLC we have one goal when we are working with clients facing divorce. To put it simply, it is helping couples navigate the process and move on in the manner best suited for them. We do so by offering collaborative, mediated, and conventional approaches to the legal dissolution of marriage. We also do so by helping them craft a formal document covering relevant legal issues.
This document is known as a Marital Settlement Agreement, Separation Agreement, or Property Settlement Agreement. Regardless of its moniker, it is a contract between the parties that details the terms of their divorce settlement.
What is in a property settlement agreement?
As Virginia divorce lawyers, we consider several key issues while drafting a Marital Settlement Agreement for our clients. These are child support and child custody, spousal support, division of assets (including real property), and division of debts. Let’s look at these in greater detail.
Child support and child custody
Clearly, these sections of a Separation Agreement are only relevant for parents — usually of minor children. They generally specify the amount of child support recommended based on statutory guidelines and the actual amount paid, how often, for how long, and so forth. They also may detail parental obligations for “extra” costs not covered by the regular child support payments. Examples include but are not limited to certain costs associated with education, extracurricular activities, childcare, and healthcare.
This portion of a Marital Settlement Agreement also deals with legal custody and details parenting schedules.
If one of you needs financial assistance after divorce, the details of any alimony or spousal support awards/agreements must be included in this section of the Property Settlement Agreement. This includes the payment amount and how long payments must be made. Provisions or stipulations pertaining to changing or terminating spousal support are also be included here.
In some circumstances, one or both parties may decide not to seek alimony. Sometimes this decision is documented in a prenuptial agreement. Sometimes, it is documented in a formal agreement made during the marriage. Sometimes it simply isn’t necessary. Regardless, the details of any agreement or decision to permanently waive the right to seek alimony through the courts should be included here.
Division of assets and debts
This is the part of the Marital Settlement Agreement or Separation Agreement where we put all of the information about “who gets what.” Accordingly, it should detail the allocation of real property (real estate) and other assets including but not limited to motor vehicles, bank accounts, investments, pensions, businesses, and so on.
In this context, it is critical to include an explanation of which property is classified as marital property (belongings acquired by one or both of you while you were married), and which is separate property. This is because Virginia Courts can divide marital property but they cannot divide separate property in most cases. However, the two of you can decide to split separate property if you wish.
This section of the Property Settlement Agreement should also detail who is responsible for outstanding financial obligations such as mortgage payments, credit card payments, car payments, and such.
To reiterate — and we cannot stress this enough — no two Marital Settlement Agreements will be exactly the same. That is because each and every situation is different.
That being stated, we also include the following information as warranted:
- The date when you officially began living “separate and apart.”
- Stipulations barring either party from seeking a fault-based divorce.
- Statements indicating that one or both of you has waived your legal right to discovery (the process in which we obtain information from the other person).
- Stipulations pertaining to relevant tax considerations include but are not limited to child/dependent tax credits, and mortgage interest, and real estate tax deductions.
Why you need a property settlement agreement
That is all well and good, but you may still be wondering if you really need a Separation Agreement. The answer is yes. In our experience, the drafting of the Marital Settlement Agreement is an important first step in the divorce process and should be handled by an experienced divorce attorney.
This is due to the fact that a signed, notarized Property Settlement Agreement is a legally binding contract. As such it is not subject to further negotiation at the time of divorce, with certain exceptions. The only contractual terms that are always modifiable in this context are those pertaining to child support and/or custody, based on a significant change in circumstances.
It is also for crucial parties that no longer want to be married, but don’t want to go through the hassles of formal divorce. This is because “legal separation” does not exist under Virginia law. Without this option, the best bet legally is to live “separate and apart” with a formal Property Settlement Agreement documenting consensus on relevant issues.
In either case, having a Separation Agreement in place before leaving the marital residence reduces the likelihood of future legal wrangling over fault-based divorce and the division of assets and debts.
Invalidation of a Virginia property settlement agreement
Finally, it is critical that you have a qualified divorce lawyer or mediator to draft or help you draft your Property Settlement Agreement. Without one, you may make a mistake that could render the agreement invalid. Although it is rare, the invalidation of a Marital Settlement Agreement may be based on:
- One party’s lack of capacity (the legal ability) to sign the agreement.
- One party exerting undue pressure on the other to sign the agreement.
- One or both parties being forced to sign the agreement under duress.
- A finding that the agreement significantly favors/benefits one of the parties.
- A determination that the agreement includes incorrect statements of important facts.
- A finding that one or more contractual terms violate relevant law or public policy.
- A finding that one or both parties did not disclose important facts needed to make an informed decision about the settlement terms.
Don’t leave anything to chance. Contact Kales & Kales, PLC to discuss your Property Settlement Agreement, today.